Obama Names Goolsbee to Lead White House Economy Panel

Austan Goolsbee, seen here, has been chosen by President Barack Obama to lead the Council of Economic Advisers. Photographer: Andrew Harrer

Sept. 10 (Bloomberg) -- President Barack Obama said he’s
appointing Austan Goolsbee to lead the Council of Economic
Advisers, calling him “one of the finest economists in the
country.”

“He is someone who has a deep appreciation of how the
economy affects everyday people,” Obama said at a news
conference in Washington today. Goolsbee has been a member of
Obama’s team of advisers since the presidential campaign.

Goolsbee replaces Christina Romer, who is leaving her post
to return to teaching at the University of California at
Berkeley.

As a sitting member of the council, Goolsbee, a former
University of Chicago business school professor, doesn’t require
a Senate vote, allowing the administration to avoid at least one
confirmation battle in Congress tied to its economic policies.

Goolsbee, 41, will be one of four principal members of the
president’s economic team looking for ways to add more jobs to
an economy with an unemployment rate of 9.6 percent. He’ll join
National Economic Council Director Lawrence Summers, Treasury
Secretary Timothy Geithner and, potentially, Jacob Lew, who is
scheduled for a Senate hearing later this month on his
nomination to replace Peter Orszag as head of the Office of
Management and Budget.

Clashing With Summers

“With the economy still in recovery, the president will
look to him for advice on policies to spur economic growth and
job creation, while also being mindful of the challenges posed
by the federal budget deficit,” said Michael Greenstone,
director of The Hamilton Project, an economic-policy research
group in Washington.

Goolsbee clashed with some members of Obama’s economic
team, including Summers, during the administration’s
intervention in the automobile industry last year. Last month,
he said the administration needed to be “mindful” about the
possibility of a new economic slump.

“I don’t think we will have a double-dip recession,” he
said on Aug. 30 on CNN. “But it’s -- clearly anybody should
keep their eye on that.”

Dispute Over Trade

During the 2008 presidential campaign, Goolsbee was
criticized after meeting with officials from Canada’s Chicago
consulate, who concluded that then-candidate Obama wasn’t
planning to reopen the North American Free Trade Agreement.

Goolsbee assured the Canadians that Obama’s campaign
promise to re-examine the trade arrangement was “more about
political positioning than a clear articulation of policy
plans,” according to a March 2008 memo, written by a Canadian
official that later became public.

Then-Senator Hillary Clinton, Obama’s opponent for the
Democratic presidential nomination, seized on the memo and it
may have helped her win the Ohio primary, where job losses were
a major election issue.

Even some of Goolsbee’s former critics said he is a good
candidate to head the CEA.

“Austan’s efforts on the campaign and during the first two
years of the administration make his appointment long overdue,”
said Douglas Holtz-Eakin, who was the top economic adviser to
Republican Senator John McCain of Arizona during the
presidential campaign. “But Obama’s misguided and dangerous
economic philosophy is so deeply entrenched that I don’t see
much that he can really accomplish at this point.”

Leading the CEA is often a stepping stone to other economic
positions, including those on the Federal Reserve.

Fed Chairman Ben Bernanke served as CEA chairman for
President George W. Bush before he was appointed to lead the
central bank. Janet Yellen, the current San Francisco Fed
president and Obama’s nominee to be the Fed’s next vice-chairman, served under President Bill Clinton.